Monday, March 3, 2014

The situation might have been different if in April 2008 the West had extended NATO membership to Ukraine and Georgia. Russia would never have dared to deploy troops on NATO territory.
Give that Europe opposed the admission of Ukraine to NATO, it should not then have tempted the Ukrainians with EU membership, exacerbating the divisions between the Ukrainians and their ethnic Russian minority.
It seems to be a tragic but hard lesson of history that Jews are often forced to play the role of canary in the mineshaft. Today, we are witnessing that phenomenon in Ukraine.
As the situation in Ukraine, where nationalists last week deposed pro-Russian president Viktor Yanukovych, is worsening, Jews are receiving blows from both sides. They are distrusted by the Ukrainian nationalists as well as the pro-Russian separatists.
With Ukraine descending into civil war, people on both sides are blaming "Jewish conspiracies" and attacking Jewish targets. The Jews, however, are not to blame for the crisis in Ukraine. The European Union is to a large extent to blame. Ukraine is an ethnically mixed country, with a large Russian minority. Preserving the balance succeeded relatively well until the EU began to foment trouble.
A recently built synagogue in Kiev, which was inaugurated in January 2012. The fence in the foreground is defaced by a swastika.
The turmoil in Ukraine began last November after President Yanukovych refused to sign an EU association treaty, preferring instead closer economic ties with neighboring Russia. Opposition parties staged demonstrations in Kiev, which were attended by EU VIPs, such as the German and Dutch Foreign Ministers, who last December mingled with demonstrators, giving the impression that the Europeans would come to Ukraine's aid if it should provoke a conflict with Russia. Meanwhile, Baroness Catherine Ashton, the face of EU diplomacy, rather than calming Ukrainian nerves, was devoting her attention to criticizing Israel and helping Iran to broker a nuclear deal with the West.
Ukraine's Russian ethnic minority is a majority in the country's eastern provinces and on the Crimean Peninsula. Crimea is a majority ethnic Russian region, which became part of Ukraine in 1954, when Soviet leader Nikita Khrushchev, who was partly of Ukrainian descent, transferred it from Russia to Ukraine, where it enjoys the status of an autonomous region. Last week, when Crimea's local parliament reacted to the ousting of Yanukovych, its leader, the pro-Russian politician Sergiy Aksyonov, announced a referendum on Crimean independence to be held 30 March.
There is little doubt that the Crimean separatists will win this referendum. Russia, which has its fleet's largest naval base in Sevastopol on the Crimea, seems to be pushing for an "Abkhazia scenario." Abkhazia is an autonomous region of Georgia, which declared independence in 2008 after Russian troops invaded the region. Apart from Russia and Venezuela, however, hardly any country recognizes its independence. Nevertheless, Georgia is no longer in control of it, and the situation on the ground is that it is ruled by its ethnic Russian leaders, while the rest of the world does not seem to care.
Despite the rattling of sabers by Ukraine's interim president, Oleksandr Turchynov, who declared that "Ukraine's military will fulfill its duties," and U.S. President Barack Obama's expression of "concern" over the deployment of Russian troops in the Crimea and the violation of Ukrainian territorial integrity, there is little doubt that the West will ultimately acquiesce to a situation in which the Crimea comes under de facto Russian control, just as it acquiesced to the Russian control of Abkhazia.
The situation might have been different if in April 2008 the West had extended NATO membership to Ukraine and Georgia. Russia would never have dared to deploy troops on NATO territory. However, though America was willing to consider NATO membership for Ukraine and Georgia, the Europeans – Germany's Chancellor Angela Merkel in particular – opposed it.
In March 2008, Merkel declared that "countries entangled in regional conflicts can not become NATO members," and then specifically referred to Georgia and Ukraine. Later that year, in August, Russian troops invaded Abkhazia. Similarly, the ultimate fate of the Crimea and Ukraine was settled in March 2008. The current warnings of Merkel and other European leaders to Russian President Vladimir Putin that "the world is watching" and "the territorial integrity of Ukraine must be preserved," are totally hypocritical. Putin knows that the Europeans signed Ukraine away six years ago. If Obama were to contemplate interfering militarily in the Crimea, the Europeans would be the first to advise against it. In the 1930s, the Europeans were not willing to "die for Danzig." Today, they are not willing to die for Kiev, let alone the Crimea. In fact, the West may consider itself lucky if Putin settles only for the Crimea, instead of pressing for the de facto secession of the entire eastern half of Ukraine.
Given that Europe opposed the admission of Ukraine to NATO, it should not then have tempted the Ukrainians with EU membership, exacerbating the divisions between the Ukrainians and their ethnic Russian minority. As a result of this reckless policy, Ukraine is about to lose territorial control over the Crimea and everyone will be worse off.
Fortunately for Ukraine's estimated 350,000 Jews, the third largest Jewish community in Europe, there is Israel. Last week, Russian-born Knesset Member Rina Frenkel, who lived in Kiev before moving permanently to Israel in 1990, sent a letter to Prime Minister Netanyahu, asking him to initiate an immediate rescue effort for Ukrainian Jews, to provide a framework to help Jews emigrate to Israel, and referring to Ukrainian history, which is replete with anti-Semitic murders and pogroms.
She also could also have referred to Europe's history of turning a blind eye to Jewish suffering – one of the reasons why the existence of Israel as a safe haven for Jews is, unfortunately, still so significant.

Friday, February 7, 2014

The Weekly Market View

I really should say, "What a Day"!
If you were trading live your computer had to be smoking at the 830AM Job report.  I couldn't even get a trade on Ninjas E-mini Dom.
But a clear uptrend was established at 1780.  Any pullbacks to the 21 EMA were a long.  The 8 EMA on the 15min actually gave you a better insight on a long trade with less fuss.

The Russell is a bit concerning.  Short term is weak compared to the other indices.  Long term it is still clearly headed down.  We will see what Monday brings.


Friday, July 1, 2011

Market Ready

Earnings start with GS on July 17th. The banks are not likely to have alot of revenue so don't expect any long term plays but you could go long golds banks and oil stocks. Tech has been in the lead for this past quarter but I'm not hopeful for the next. One just needs to look at RIMMs thrashing and the overpriced IBM to see that IWM is likely to rally and then pull back. Alot.

Thursday, May 12, 2011

Market Activity

* Asian-Pacific stock markets fall as commodities slump Shares dropped Thursday on Asian-Pacific markets after a commodity sell-off unnerved investors. Australia's S&P/ASX 200 declined 1.8%, Japan's Nikkei 225 fell 1.5% and South Korea's Kospi Composite tumbled 2%. Hong Kong's Hang Seng Index gave up 0.9%, China's Shanghai Composite slid 1.4% and New Zealand's NZX 50 lost 0.5%. Taiwan's Taiex added 0.2%. In afternoon trading, Singapore's Straits Times Index lost 1.4%, India's Sensex fell 1.2%, and Indonesian shares and Thailand's SET were down 0.9%. The Wall Street Journal (tiered subscription model) (12 May.)

* Gasoline futures slide 8% as Americans cut back driving Gasoline futures ended a rally and dropped almost 8% after the U.S. government reported that people are driving less. The Energy Information Administration reported that demand for gasoline fell 2.4% last week. With gas at or close to $4 a gallon, demand has been declining for seven weeks, but last week's drop was the biggest. USA TODAY/The Associated Press (11 May.)

* Sovereign-debt crisis could drag down all of Europe, IMF says Debt problems in Portugal, Ireland and Greece run the risk of spreading to stronger economies in the eurozone and into Eastern Europe, the International Monetary Fund said. "Strong policy responses have successfully contained the sovereign debt and financial sector troubles in the euro area periphery so far, but contagion to the core euro area, and then onward to emerging Europe, remains a tangible downside risk," the IMF said in its semiannual report on the European economy. The Wall Street Journal (tiered subscription model) (12 May.), (12 May.), Agenzia Giornalistica Italia (Italy) (12 May.)

*the markets are oversold in the short term and the PPT is trying their damnest to hold them up on the weekly (which looks out over the next three months). So proceed with caution. Those banks on the XLF MUST start moving upward or we will likely go back and test that 1325 on the S&P. If IWM breaks to the downside today then S&P may test the 1300. Happy trading!

Wednesday, March 30, 2011

Debt: The Original Frontier

*for all you whiners out there complaining about our debt. Most of you are Reagan sympathizers so some history is in short order. And PS: Congressman Ryan said "if we don't vote for this, it will be armageddon financially." So said the presidential runner up in support of you guessed it, TARP, the biggest Wall Street bailout package of all time. Hummmmm, looks a little like Reagan, smells a little like Reagan, maybe its Reagan reincarnate! Won't Nancy be happy...

And isn't it interesting that as US debt rose so goes the stock market?

The Reagan/Bush/Clinton Bull Market:
September 30, 1982 "Temporary" $US 1,290,200,000,000
End 1982: What the hell! Distinction between "temporary" and "permanent" ceiling eliminated.

As most students of the U.S. stock market know, the great bull market on the Dow began in August 1982, from a level of 776 points.

Eleven years before that, in early 1971, the U.S. Treasury's debt ceiling was "permanently fixed at $400 Billion. That fiction was maintained for eleven years, through "temporary" debt ceiling increases. By late 1982, actual Treasury debt was three times the permanent "ceiling of $400 Billion, so the decision was made to eliminate the distinction between "temporary" and "permanent"

From that point in 1982 until almost the end of 1995, the Dow and the level of U.S. debt rose in almost lock step with each other. In fact, barring the two years after the crash of October 1987, you could come pretty close to finding the level of the Dow by taking the level of U.S. Debt and dividing by 1 billion.

That has all changed since the middle of 1995. While the rate of increase in U.S. debt has definitely slowed down, the rise on the U.S. stock market (as measured by the Dow) has accelerated.

There are three main reasons for this:

1. From early 1995 until the "Asia Crisis" hit in mid 1997, foreign Central Banks led by the Bank of Japan bought almost all newly created U.S. debt. That relieved all pressure on U.S. interest rates, and freed up domestic capital to pour into the stock market.

2. Americans themselves abandoned the banks and real estate in favor of the stock market. Ever since early 1995, the last remnants of U.S. savings and an avalanche of borrowed money have been flowing straight into stocks.

3. Because existing capital and new borrowing were flowing into equities, price rises in the producing economy ground to a virtual halt. This was hailed as the "end of inflation".

The Three Great Bull Markets

Treasury debt actually fell throughout the 1920s. There was a huge surge in business productivity.

At the beginning of this period, the U.S. was probably the most dominant nation, in terms of both wealth and military power, that the world has ever seen. Again, this period was one of huge increases in business productivity and very minor increases in government debt.

1982 to date:
U.S. government debt rose from $1.2 to nearly $5.7 TRILLION. In 1985, the U.S. became a net debtor nation for the first time since before WW1. Ever increasing volatility in all financial assets, notably in currency exchange rates. Financial crises endemic throughout the period.

Wednesday, March 23, 2011


The volume is falling but price going up up and away? This is a headfake rally. If XLF falls below 15.95 and IWM breaks 81.60 then its all over till earnings season starts on April 11. The scheisters are setting the market up for their benefit and your stupidity. The MACD is now rolling over and the Stochastics are in the kill zone. If they do QE3 in June or hint of it then we will see 15,000 on the Dow. But there's a long way to go till then. They are likely to come back and test that
1250. And with oil now trading at $106 a barrel, you can bet your booty it will retest. The weekly long term chart looking out 3 months is still RED!

Wednesday, September 15, 2010

States cutting benefits for public-sector retirees

TRENTON, N.J. (AP) -- The security guards at the headquarters of New Jersey's pension fund have never seen anything like it before: lines of public employees extending out the door and into the street.

Day after day, workers come in droves to apply for retirement. They often line up before dawn.

The rush has been set off in part by Republican Gov. Chris Christie's campaign in this cash-strapped state to make government employment -- and retirement -- less lucrative.

Since 2008, New Jersey and at least 19 other states from Wyoming to Rhode Island have rolled back pension benefits or seriously considered doing do -- and not just for new hires, but for current employees and people already retired.

After telegraphing his intentions for months, Christie spelled out the details of his proposal Tuesday. They include: repealing an increase in benefits approved years ago; eliminating automatic cost-of-living adjustments; raising the retirement age to 65 from 60 in many cases; reducing pension payouts for many future retirees; and requiring some employees to contribute more to their pensions.

"We must reverse the damage caused by fairy-tale promises that have fattened benefits and pensions to unsustainable levels," the governor said.

To be sure, the looming benefit changes are not the only reason many public employees in New Jersey are retiring. Some say they want out for the usual reasons -- to spend time with the grandchildren or go fishing, for example -- or complain that government layoffs and other cutbacks are making work unbearable. But other employees figure that by retiring now, they can lock in certain benefits before it is too late.

William Liberty started as a trash collector in Lindenwold 37 years ago and worked his way up to a job as public works supervisor. But his pay has been frozen for two years and he has to take an unpaid furlough day a month. And given Christie's pension cut proposals, "it's going to get worse," Liberty said.

He hoped to keep the job until he turned 65. But at 62, he went last week to the state pension office to see about retiring soon.

Christie has warned that New Jersey's pension fund will go belly up unless something is done to close the $46 billion gap between how much the state expects to bring into the system and how much it has promised to workers. Other states' pension funds are in shaky condition, too.

The Pew Center on the States reported this year that in eight states, at least one-third of the future pension obligations for all public employees, including teachers, are unfunded. As of 2008, Pew said, state and local governments had pension obligations totaling $3.35 trillion -- $1 trillion of that not covered by the future stream of government and employee contributions specified under current law.

Only four states -- Florida, New York, Washington and Wisconsin -- had fully funded pension systems as of 2008.

Part of the reason for the gap is that in tough times, states often skip paying their share into retirement funds. New Jersey, for instance, is skipping its $3.1 billion in payments this year. The problem is compounded when investments lose money, as many have in recent years. In 2008, for instance, the Pennsylvania State Employees' Retirement System fund had investment losses of nearly 29 percent -- the worst in the country.

In the past, states have been more likely to reduce pensions for incoming employees, while generally leaving the benefits of current workers and retirees untouched. That strategy can be a way around objections from unions and lawsuits from those who say the government is reneging on promises.

Tuesday, September 14, 2010

The Public Pension Bomb Is Set To Explode and NJ Is The Worst


In state capitals and universities across the U.S., leaders are facing the unpleasant reality that they don’t have enough money to meet their future pension obligations. States alone are facing a $1 trillion shortfall, according to the Pew Center on the States.
This is a crisis albeit a really slow-moving one. More than half the states had fully funded pension systems in 2000. Six years later, only six could make that claim. There were only 4 by 2008. Two states–Illinois and Kansas–had less than 60 percent of the necessary assets on hand.

New Jersey, the home of the nation’s highest property taxes, deserves a special place in the fiscal hall of shame. The Garden State’s pension shortfall was $45.8 billion as of June 30, 2009, or more than $5,200 for every man, woman, and child, according to the Philadelphia Inquirer. It’s the highest unfunded liabilities of any state on a per-capita basis. There is, unfortunately, plenty of blame to go around among Democrats and Republicans.

“New Jersey had a $7.5 billion pension surplus in 2000, but years of failing to meet the actuarially required contribution led to an unfunded liability of $34 billion in 2008,” according to Pew. “This has left the state’s pension plans with 73 percent of the assets needed, below the 80 percent benchmark that the U.S. Government Accountability Office says is preferred by experts.”

That’s right, the leaders in the state that sucks away my tax dollars into a fiscal black hole just decided that they didn’t feel like paying a pesky, but important bill. Because New Jersey leaders lived in a dream world for years, taxpayers are paying the price today. Assuming an 8 percent return on investments — a big if — and that the state makes its required contributions — another big if — New Jersey’s public employee pension funds will go broke in 2019, according to an economist quoted by the Inquirer.

“They have gotten themselves into a deeper hole than many other places,” says Elizabeth McNichol, a senior fellow at the Center for Budget and Policy Priorities, in an interview.

Governor Chris Christie (R) is vowing to cut pension payouts and may rollback a 2001 increase. The state’s unions, who already hate Christie, are fuming. Christie, though, says he has no other choice. He is expected to unveil a reform plan this week.
“This year, according to actuarial calculations, the state was supposed to contribute $3.1 billion to the pension system,” the Inquirer says. ” Of that amount, $1.8 billion was to pay for the unfunded actuarial accrued liability, while only $1.2 billion was for current costs. Under Christie’s first budget, the state put in nothing.”
Declining stock market returns have also hurt other states such as Illinois. The Prairie State has only funded 54 percent of its pension liability of $54.4 billion. State officials have failed to meet their actuarial obligations for years though in 2009 they issued $3.5 billion in bonds to pay for their 2010 contributions, according to Pew.

Even public universities are grappling with the issue. Officials at the University of California are poised to make sweeping changes to their pension plans to close a $24 billion shortfall to pay for pension and health care benefits for retirees.
Public pensions are a time bomb waiting to explode as Baby Boomers retire. Either we must deal with the problem now or face dire consequences later.
–Jonathan Berr


Asian markets are mixed as investors in Tokyo become cautious
Asian share markets were mixed Tuesday, as the ruling party in Japan held a vote to determine the prime minister. Japan's Nikkei 225 slid 0.2%, Australia's S&P/ASX 200 rose 0.5% and South Korea's Kospi Composite shed 0.1%. China's Shanghai Composite was unchanged, Hong Kong's Hang Seng Index inched up 0.1% and India's Sensex was up 0.7%. Taiwan's Taiex tacked on 0.2%, Singapore's Straits Times Index gave up 0.4% and Malaysia's Kuala Lumpur Composite climbed 0.8%. The Wall Street Journal (14 Sep.)

All U.S. taxpayers have a stake in Congress' tax-cut maneuvering
Every U.S. taxpayer will be affected by the outcome of debate in Congress regarding whether to extend Bush-era tax cuts and credits scheduled to expire this year. Congress has a few options available, including extending all of the measures, letting them expire or continuing them with change, such as limiting their benefit to middle-income families. The Christian Science Monitor has reviewed such proposals, which might not make it to a vote before November. The Politico (Washington) (13 Sep.)

Japan's yen rockets to a 15-year high against the U.S. dollar

The value of Japan's yen against the U.S. dollar has soared to its highest level since May 1995, as traders correctly anticipated that Prime Minister Naoto Kan would defeat challenger Ichiro Ozawa in an election. Foreign exchange experts said Kan is seen as less likely than Ozawa to intervene in the currency market, increasing the chance of further gain for the yen. Asahi Shimbun (Japan) (14 Sep.)

Analysis: Basel III's phase-in period might be too long:
The Basel Committee on Banking Supervision has given banks about eight years to comply with revamped capital rules, giving the sector enough time to recover and then reach a crisis point again, according to The Wall Street Journal. The lengthy phase-in period implies that finance ministers are concerned with the fragility of economies and financial institutions or that they have confidence that banks will voluntarily become more cautious. The Wall Street Journal (14 Sep.)

China will authorize CDS trading by year-end, an official says
Before the end of the year, China will allow the trading of credit default swaps, intended to help banks hedge risk, said Shi Wenchao, secretary general of the National Association of Financial Market Institutional Investors. The government will prohibit CDS trading on high-risk asset classes, such as subprime mortgages, and restrict the amount of leverage used. Bloomberg (14 Sep.)

Friday, September 10, 2010


Deutsche Bank considers an $11.4B stock offering, sources say
Germany's biggest bank, Deutsche Bank, has started discussing with securities firms about a stock offering worth as much as $11.4 billion, sources said. The bank would use the money to exercise an option to increase its ownership of Deutsche Postbank and to comply with proposed capital rules from the Basel Committee on Banking Supervision, the sources said. Bloomberg (10 Sep.)

Goolsbee will chair Obama's Council of Economic Advisers:
Austan Goolsbee, a former University of Chicago economics professor who specializes in tax policy, will be named chairman of the Council of Economic Advisers, White House officials said. Goolsbee and U.S. President Barack Obama have known each other since 2004, when they taught at the university. The appointment doesn't require Senate approval because Goolsbee already serves on the council. Los Angeles Times (10 Sep.)

*a few different takes

Trade and jobless data indicate the U.S. recovery is still happening
The U.S. trade deficit dropped significantly in July, and first-time claims for unemployment benefits decreased last week by considerably more than experts had forecast. While the recovery is painfully slow, the chance of another downturn is fading, economists said. Reuters (09 Sep.)

Data show U.S. health care costs will first rise, then decline
It will take at least five years for U.S. health care reform to start bringing down medical costs, according to government estimates. The law's consumer-friendly provisions will push up spending between this year and 2014, then limit increases from 2015 to 2019, the Centers for Medicare & Medicaid Services said. (09 Sep.)

U.S. Treasury receives $16 billion from TARP investments
A report from the U.S. Treasury Department shows that the government has received about $16 billion in interest and dividend from investments made in financial institutions through the Troubled Asset Relief Program. Government data show that $666 million in payments, about half coming from banks involved in the capital-purchase program, have been made since the last report in August. Bloomberg (09 Sep.)

Thursday, September 9, 2010

Initial Jobless Claims Down More Than Forecast

Trade Deficit Also Down Less Than Forecast

*expect a rally today to try and hit the 200 day moving average on the S&P. We are so close really and as long as Asian and European markets can keep a lid on their problems, at least temporarily, the US will milk it for all its worth and continue to drop the dollar so the 10 yr and the stock market can go up. The only problem we have is that markets and a good deal of stocks overall, are all getting up to overbought levels on the daily charts. That being said, it hasn't stopped them in the past from ticking it to the upside going into election. Remember, the party in charge gets to control the flow of info, therefor, the stock market. A look at today's numbers should give you the clue.


Most Asian markets gain, but Chinese shares experience decline
Concern that the Chinese government will tighten policy further led to a drop in shares of the country's banks and property developers Thursday, weighing on the Shanghai Composite. Most Asian share markets advanced, however. Japan's Nikkei 225 went up 0.8%, Australia's S&P/ASX 200 climbed 1% and South Korea's Kospi Composite added 0.3%. China's Shanghai Composite dropped 1.4%, while Hong Kong's Hang Seng and Singapore's Straits Times indexes rose 0.4%. Taiwan's Taiex slipped 0.2% and New Zealand's NZX 50 lost 0.3%, while India's Sensex was up 0.5% in afternoon trading. Markets in Indonesia were closed. The Wall Street Journal (09 Sep.)

Obama pushes GOP to allow tax breaks and infrastructure spending
U.S. President Barack Obama called for Republicans to support his proposed tax breaks for businesses and $50 billion in spending to improve roads, airports and railroads, saying many of the ideas were backed by Republicans in the past. Speaking to a rally in Parma, Ohio, he urged Republicans to allow a swift vote in the Senate on a bill for small-business lending. Obama said Republicans helped write the legislation, which the U.S. Chamber of Commerce has endorsed. USA TODAY (09 Sep.)

Blue Chip Economic Indicators forecasts slower U.S. growth
For the third consecutive month, a panel of economists revised downward its projection for U.S. economic growth this year and in 2011. The 2010 forecast for the Blue Chip Economic Indicators was cut by 0.2 percentage point to 2.7%, and the economists lowered their projection for 2011 by 0.3 percentage point to 2.5%. Reuters (09 Sep.)

WEF: U.S. drops from second to fourth in economic competitiveness
The U.S. has fallen from second place to fourth among the most competitive economies, leaving Switzerland with the top ranking and falling behind Sweden and Singapore, according to the World Economic Forum. The group said the U.S. dropped on the list because of concern about the condition of its financial market, its weakening public and private institutions and a global economic imbalance. Reuters (09 Sep.)

Citi officials knew of mounting loan losses, the SEC says
The Securities and Exchange Commission said in a court filing that Citigroup officials, including Charles Prince and Robert Rubin, knew that losses on the bank's mortgage assets were mounting in 2007. Regulators have faulted Citigroup for failing to disclose the losses. Prince and Rubin were CEO and chairman, respectively, at the time. Bloomberg (09 Sep.)

*the key word here is "likely". NOT!
Moody's says U.S. banks have written down most of their bad loans
U.S. banks likely have written off about two-thirds of troubled loans they are expected to face through next year, according to Moody's Investors Service. "It is clear to us that bank asset-quality issues are past the peak," said Craig Emrick, senior vice president at Moody's. "However, charge-offs and nonperformers remain near historic highs." Google/The Associated Press (08 Sep.)

Report: Canada's housing market is cooling but not collapsing
Canada's housing market is going through a marked slowdown, but isn't close to a crash of the sort suffered by the U.S., according to The Conference Board of Canada. The think tank's finding comes after Statistics Canada released data showing that the total value of building permits for residential construction declined in July for the fourth consecutive month. Financial Post (Canada) (08 Sep.)

Trading partners are anxious about a drop in German factory orders
German manufacturers saw a sharp decline in orders in July, sparking concern of a slowdown among trading partners across Europe. Germany's expansion has been the one bright spot for the region's economy. However, German officials and economists have warned that despite a recent growth spurt, the nation can't sustain a high rate of growth if European governments implement austerity programs and the U.S. economic recovery continues to struggle. (Ireland) (09 Sep.)

Protracted oil and gas glut is developing worldwide, experts say
Oil and gas supply entering production combined with weak demand from developed nations is setting the stage for a lengthy oil and natural gas glut, experts said. The excess supply could drive the price of oil to $50 a barrel or lower for years, they said. (08 Sep.)

Analysis: Social Security didn't get fixed in 1983 after all
Actuarial problems that led U.S. policymakers to implement a fix for Social Security in 1983 are back because the fix was was undone by the way the government accounted for extra contribution from baby boomers, according to The Economist. Instead of treating the money as dedicated overpayment to Social Security, politicians lumped it in with general revenue, making it easier to cut taxes and run up the deficit. With boomers retiring, it looks as if Generation X will end up with the bill, the magazine notes. The Economist/Democracy in America blog (08 Sep.)

Wednesday, September 8, 2010

Health Insurers Plan Hikes

*you could knock me over with a heart attack with this surprise!
Rate Increases Are Blamed on Health-Care Overhaul; White House Questions Logic

Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats' efforts to trumpet their signature achievement before the midterm elections.
Health insurers say they plan to raise premiums for some Americans as a direct result of the health overhaul in coming weeks, complicating Democrats' efforts to trumpet their signature achievement before the midterm elections. Aetna Inc., some BlueCross BlueShield plans and other smaller carriers have asked for premium increases of between 1% and 9% to pay for extra benefits required under the law, according to filings with state regulators. These and other insurers say Congress's landmark refashioning of U.S. health coverage, which passed in March after a brutal fight, is causing them to pass on more costs to consumers than Democrats predicted.


Asian share markets decline as financial stocks take a hit
Most Asian stock markets were down Wednesday, with exporter shares weighing on Tokyo's Nikkei and financial stocks in the region suffered a blow. Japan's Nikkei 225 plunged 2.2%, Australia's S&P/ASX 200 slid 0.8% and South Korea's Kospi Composite dropped 0.5%. Hong Kong's Hang Seng Index fell 1.5%, China's Shanghai Composite inched down 0.1% and New Zealand's NZX 50 slipped 0.4%. Singapore's Straits Times Index gave up 0.8% and India's Sensex lost 0.2% in afternoon trading. The Wall Street Journal (08 Sep.)

Builders restart projects as banks unload distressed assets
Construction is resuming on some housing projects in the U.S. that collapsed during the recession, as builders buy lots from lenders for less than half of their original cost. Mothballed developments are being restarted in suburban Washington, D.C., and in select markets in California, Florida, Utah and Las Vegas, said Brad Hunter, chief economist for housing-research firm Metrostudy. Bloomberg (08 Sep.)

Stimulus money goes unspent because of a staff shortage, auditors say
A staff shortage in managing stimulus programs is keeping money appropriated by Congress from flowing into the U.S. economy, government auditors said. The problem has been building for years but has reached a breaking point, said Recovery Board Chairman Earl Devaney. The Energy Department has spent only 8.4% of $3.2 billion appropriated for energy-efficiency projects because it doesn't have enough grant officers. USA TODAY (08 Sep.)

Obama is against extending Bush-era tax cuts for the rich:
U.S. President Barack Obama will make it clear that he opposes any extension of Bush-era tax cuts that include the wealthy, White House officials said. Many congressional Democrats have been waiting for a straightforward answer from Obama so they can go ahead with a showdown with Republicans on the issue, analysts said. The New York Times (free registration) (07 Sep.)

China's property-market bubble is poised to burst
Property has emerged as the preferred investment choice for the Chinese, and the situation is fueling concern that the market is bubbling. A prominent economist said China's property market has overheated. "Many of them are bought by property speculators betting on a constantly rising property market," Yi Xianrong wrote in a commentary in People's Daily. "This is a serious threat to the sustainability of China's economy." (08 Sep.)

China considers a reserve ratio for banks to cover loan losses
The China Banking Regulatory Commission is considering adopting a reserve requirement to keep financial institutions from getting into trouble because of bad loans, Shanghai Securities News reported. If the rule is adopted, banks will have to hold about 2.5% of their total loan value, according to the newspaper. China Daily (Beijing) (08 Sep.)

Survey: Banks expect more loan applications, fewer qualified borrowers
A quarterly survey from FICO found that nearly 75% of U.S. lenders expect an increase in loan applications this year but are concerned that fewer borrowers will qualify. More than two-thirds of risk professionals surveyed said they expect the rate of credit approval to decline. Bankers also expect to face increased delinquency on small-business loans, mortgages, credit cards, auto loans and student loans, according to the survey. Bloomberg Businessweek/The Associated Press (07 Sep.)

Japan and Australia indicate difficulty in setting monetary policy
The central banks of Australia and Japan signaled that a deteriorating growth outlook for the U.S. has made it more difficult for them to determine monetary policy. The Reserve Bank of Australia decided to continue holding interest rates despite a solid increase in the nation's gross domestic product, and the Bank of Japan said more monetary stimulus is possible. "If the U.S. economy slows more than forecast and if there is a double-dip, then clearly there are significant implications for policy elsewhere," said Mitul Kotecha of Credit Agricole CIB. Bloomberg (07 Sep.)

Commentary: Politicians don't understand structural unemployment
As Democrats and Republicans argue about the economy, they are ignoring the fact that the disappearance of 8 million jobs relates to factors that are more structural than cyclical, business columnist Steven Pearlstein writes. For decades, the U.S. has allowed its industrial and technological base to deteriorate, and fiddling with government spending won't change that. "In this election season, the politicians who are really serious about creating jobs and bringing down unemployment won't be the ones screaming about tax cuts, or stimulus or some imagined government takeover of the economy," Pearlstein writes. "They'll be the ones talking about how to make the American economy competitive again." The Washington Post (07 Sep.)

Tuesday, September 7, 2010


Steel companies in Asia gain as markets end mixed
Asian share markets closed mixed Tuesday, with steel companies advancing because of an expectation that steel prices will increase in China. Japan's Nikkei 225 slid 0.8%, Australia's S&P/ASX 200 inched down 0.1% and South Korea's Kospi Composite slipped 0.3%. China's Shanghai Composite added 0.1%, Hong Kong's Hang Seng Index gained 0.2% and New Zealand's NZX 50 climbed 1%. In afternoon trading, India's Sensex was up 0.3%and Singapore's Straits Times Index lost 0.4%. The Wall Street Journal (07 Sep.)

U.S. stock dividends are exceeding bond yields the most in 15 years
With U.S. corporate profit increasing at the fastest rate in two decades, more stocks are paying dividends higher than bond yields than at any time in the past 15 years. Shares in Johnson & Johnson, the world's biggest health-product company, pay a 3.66% dividend, compared with a 2.66% interest rate on the company's 10-year debt sold last month. Companies increased payout by 6.8% in the second quarter, according to data compiled by Bloomberg. Bloomberg (07 Sep.)

U.S. tech sector is healthy but not creating many jobs
Hope is fading that a relatively strong high-tech sector in the U.S. will play a big part in bringing down unemployment. Profit at technology companies is surging, but the firms are reluctant to add employees. Hiring in software publishing and data processing has posted a decline. The New York Times (free registration) (06 Sep.)

Obama wants $50 billion spent on roads, railroads and airports
U.S. President Barack Obama said during a Labor Day rally that he will ask Congress to approve a $50 billion program to rebuild the transportation system, create jobs and reduce unemployment. The plan calls for constructing or improving 150,000 miles of roads, 4,000 miles of rail lines and 150 miles of airport runway during a six-year period. The proposal is one of a series of job-creation initiatives the White House plans to announce as the November midterm election approaches. USA TODAY (07 Sep.)

Analysis: Underwater mortgages are the real problem in housing
It doesn't make sense for the U.S. to spend money to prop up the housing market by giving buyers incentives, but that doesn't mean sitting back and letting prices crash would "magically" bring the housing market back to life, as some have suggested, according to The Economist. At the core of the problem are homeowners with underwater mortgages who can't afford to sell at prices buyers are willing to pay. "Driving those prices lower won't change that fact," the magazine notes. The Economist/Free Exchange blog (06 Sep.)

Europe's stress tests understated some banks' debt risk, analysis shows
Europe's major banks were required as part of the recently conducted stress tests to disclose their government-debt holdings. However, a Wall Street Journal analysis found that the tests understated some banks' holdings of potentially risky sovereign debt. The Wall Street Journal (07 Sep.)

Wednesday, August 25, 2010


Asian markets dip as the Tokyo index drops to a record low
Asian share markets declined Wednesday after a drop on Wall Street. Japan's Nikkei 225 fell 1.7%, Australia's S&P/ASX 200 gave up 1.4% and South Korea's Kospi Composite dropped 1.5%. Hong Kong's Hang Seng Index shed 0.1%, Taiwan's Taiex plunged 2.6% and China's Shanghai Composite fell 2%. New Zealand's NZX 50 lost 0.6%, while Singapore's Straits Times Index gained 0.1% and India's Sensex was down 0.3% in afternoon trading. The Wall Street Journal (25 Aug.)

BHP Billiton says won't buy Potash "at any cost"
(Reuters) - BHP Billiton, the world's biggest miner, tried to dampen expectations it would substantially raise its hostile $39 billion bid for Potash Corp as bumper results showed it has plenty of firepower.
"I will be as disciplined on this bid as I've been on every other endeavor," Chief Executive Marius Kloppers told a conference call with reporters on Wednesday. "The shareholders own the company and it's my job to create more value for them, not to do any one thing at any cost."
BHP posted its best half-year profit in two years and a hefty balance sheet confirmed the miner has the financial muscle to raise its $130-per-share offer for the top global fertilizer maker, with net annual cash flows of $17.9 billion.

Home sales plunge, fueling concern about the U.S. recovery
Sales of existing U.S. homes fell to their lowest level since 1999 in July, raising concern that the economy is weakening and headed into a long period of stagnation or a double-dip recession. The National Association of Realtors said home sales dropped 27.2% between June and July, a bigger decline than expected. For single-family houses, which account for most residential transactions, the sales rate was at its lowest since May 1995. Los Angeles Times (25 Aug.)

Report: Fewer recently modified mortgages are falling into foreclosure
Recent mortgage modifications in the U.S. are more successful at keeping borrowers from losing their homes in foreclosure than those completed earlier in the housing crisis, according to a report by the State Foreclosure Prevention Working Group. Homeowners who obtained a mortgage modification in 2009 were nearly 50% less likely to fall 60 days behind on their payments compared with those whose mortgages were modified in 2008, according to the report. Google/The Associated Press (24 Aug.)

S&P lowers Ireland's credit rating to AA-minus
Standard & Poor's took Ireland's credit rating down one notch as the risk premium demanded by government-bond buyers widened to an all-time high, measured against the benchmark German bund. S&P downgraded Ireland's credit rating from AA to AA-minus, an action that might further increase the country's borrowing costs. The Irish Times (Dublin) (25 Aug.)

Drilling ban's harm to the Gulf economy is not as grave as expected
The Obama administration's six-month ban on deep-water oil drilling hasn't hit the Gulf Coast economy as hard as experts and officials expected, according to The New York Times. Unemployment claims growing out of the ban have numbered in the hundreds, not thousands. Of 33 deep-water rigs operating in the Gulf of Mexico before BP's spill, only two have left the area. Pensacola News Journal (Fla.) (24 Aug.)

Report: 1 of 5 big firms considers moving to leave U.K. tax system
A report prepared for Britain's taxing authority shows that about 20% of major companies have looked into moving offshore to get out from under the nation's system of taxation. The study notes that 62% of the biggest firms think complying with tax rules has become more difficult in the past 12 months. Many businesses said the taxing agency has become less transparent in its decision-making. Telegraph (London) (25 Aug.)

Analysis: Technology is the culprit for lost manufacturing jobs
Revised industrial policy, trade sanctions against China and a cheap U.S. dollar are powerless to reverse a loss of manufacturing jobs in the U.S., a trend that has been under way for a half century despite growth in the sector, according to The Economist. Manufacturing has become more productive and less labor-intensive through technology, and that's not going to change. "Time to accept that reality and figure out how best to prepare workers for the good jobs to come," the magazine notes. The Economist/Free Exchange blog (23 Aug.)

Analysis: Fed seems ready to boost recovery next month
The good news from the Federal Open Market Committee is that the Federal Reserve's chairman and vice chairmen recognize the importance of making a further effort to keep the U.S. recovery from stalling, and that action might come in September, according to The Economist. Asset purchases and a meaningful change in the central bank's language are likely. "The belief that the Fed will step in if things get bad enough is what is providing a floor under stock indexes and perhaps on the recovery as a whole," the magazine notes. "Strip that away, and things will rapidly fall apart." Telegraph (London) (24 Aug.)

Monday, August 2, 2010

Pubby's get a what fer from one of their own: George W. Bush. How Bush Created the Mess We Are In..

*Well well well. I love to say I told you so. So it wasn't ALL jackass' fault after all. And don't forget that Greenspan, that good ole Reagan, Clinton and Bush' buddy boy, said yesterday on Meet the Press: we could go into a double dip if housing prices continue to drop. Now I ask you, you didn't really think Dodd and Frank acted alone did ya? IJIOTS!
The Reckoning
White House Philosophy Stoked Mortgage Bonfire

Rich Addicks/Atlanta Journal-ConstitutionTHE BLUEPRINTS In June 2002, President Bush spoke in Atlanta to unveil a plan to increase minority homeownership.

WASHINGTON — The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, “scared the hell out of everybody.”

It was Sept. 18. Lehman Brothers had just gone belly-up, overwhelmed by toxic mortgages. Bank of America had swallowed Merrill Lynch in a hastily arranged sale. Two days earlier, Mr. Bush had agreed to pump $85 billion into the failing insurance giant American International Group.

The president listened as Ben S. Bernanke, chairman of the Federal Reserve, laid out the latest terrifying news: The credit markets, gripped by panic, had frozen overnight, and banks were refusing to lend money.

Then his Treasury secretary, Henry M. Paulson Jr., told him that to stave off disaster, he would have to sign off on the biggest government bailout in history.

Mr. Bush, according to several people in the room, paused for a single, stunned moment to take it all in.

“How,” he wondered aloud, “did we get here?”

Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed.

There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk.

But the story of how we got here is partly one of Mr. Bush’s own making, according to a review of his tenure that included interviews with dozens of current and former administration officials.
From his earliest days in office, Mr. Bush paired his belief that Americans do best when they own their own home with his conviction that markets do best when let alone.
He pushed hard to expand homeownership, especially among minorities, an initiative that dovetailed with his ambition to expand the Republican tent — and with the business interests of some of his biggest donors. But his housing policies and hands-off approach to regulation encouraged lax lending standards.

Mr. Bush did foresee the danger posed by Fannie Mae and Freddie Mac, the government-sponsored mortgage finance giants. The president spent years pushing a recalcitrant Congress to toughen regulation of the companies, but was unwilling to compromise when his former Treasury secretary wanted to cut a deal. And the regulator Mr. Bush chose to oversee them — an old prep school buddy — pronounced the companies sound even as they headed toward insolvency.
for full article

Sunday, August 1, 2010

The WEEK That Was

*The S&P 500 has yet to break out above the 200 Day Moving Average. This is a key level of resistance. When you take into consideration that we are in earnings season, you would expect them to hoodwink us into buying the kool-aid. But surprise surprise. We are still in a traders market and they are becoming a little smarter to their game and sending them packing. But, you never know.

The "Real" Mega-Bears
August 1, 2010 weekend update
It's time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.
This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.

Has the Growth Index also served as a leading indicator of the stock market? The next chart is an overlay of the index and the S&P 500. The Growth Index clearly peaked before the market in 2007 and bottomed in late August of 2008, over six months before the market low in March 2009.
The most recent peak in the Growth Index was around the first of September, 2009, almost eight months before the interim high in the S&P 500 on April 23rd. Since its peak, the Growth Index has declined dramatically and is now well into contraction territory.
It's important to remember that the Growth Index is a moving average of year-over-year expansion/contraction whereas the market is a continuous record of value. Even so, the pattern is remarkable. The question is whether the latest dip in the Growth Index is signaling a substantial market decline like in 2008-2009 or a buying opportunity like in June 2006.

*are they serious? A shortage of boxes? How about a shortage of consumers you morons!
US shippers wary as box shortages continue
Large shippers concerned about supply as back-to-school and pre-Christmas peak season gets underway
SOME of the largest shippers in the US are continuing to suffer from container shortages as the back-to-school and pre-Christmas peak shipping season gets underway on the transpacific trade.
During what is a traditional financial results season for US-listed corporations, executives leading firms shipping toys, clothing and household goods reported facing problems with both capacity on vessels and a shortage of boxes.
However, with US retailers of these products reluctant after being stuck with vast amounts of stock when the recession first hit and consumer spending tightened, friction was growing with shippers who were concerned goods weren’t being ordered far enough in advance.
Toymaker Mattel’s chief executive Bob Eckert said: “Today I am probably more concerned about supply than demand. In China we see labour supply tightening, the rates are up, shipping containers are in short supply and freight is taking longer to move than it sometimes does.”

*everytime we get this sort of headline, the market drops another 100 points. We will keep an eye on the rabbit.
Chinese Manufacturing Growth SlowsBEIJING—China's manufacturing activity expanded at the slowest pace in 17 months in July, an official gauge showed Sunday, reflecting that tightening measures introduced earlier this year and growing uncertainty over global demand continued to weigh on the country's economic expansion.
China's official PMI, issued by the China Federation of Logistics and Purchasing and the National Bureau of Statistics, fell to 51.2 in July from 52.1 in June, the third straight month in which it has declined. The reading was also closer to the expansionary threshold of 50 than it had been in 17 months. A reading below 50 signals contraction.

*in the black all week long, albeit slightly. Explains the back and forth in the stock market too.
30 July 2010
Baltic Dry Index (BDI) +25 1967

*GDP was rejiggered to the downside and its not a very good Q for earnings is it? Those rosy forecasts that those scheiter CEO's were making are going to bite the dust too. Will the real Obama please stand up? JOBS JOBS JOBS! Get that do nothing Congress to do what it should be doing to earn the overbloated salary its getting: forge a public works project bill IMMEDIATELY! And you should be taking a page from reagans playbook: Embarrass the useless bastards on TV. You are not gonna get reelected if you don't start creating some serious work life for all of us.

Great Recession was Worse than Thought
I detailed that Q1 GDP was revised up one full point... great news right?
Not when past quarters have been revised down. Per Calculated Risk:
The recession was worse in 2008 than originally estimated.Q1 2010 was revised up, but Q3 and Q4 2009 were revised down. So the recovery is a little weaker than originally estimated.

Changes to Q1 were extremely broad since the numbers went "final" a month back, GDP jumped a full point from 3.7% to 2.7% due to a large jump in non-residential investment and a huge spike in inventory build (the question is who will be buying) offset by a rather large drop in service consumption.

Friday, July 30, 2010

Consumer Sentiment Sags and GDP Contracts More Than Initially Forecast Yet Banks and Market Continues to Climb???

Something smells to me....

Marc Faber AKA: ‘The Gloom, Boom & Doom Report’ Talks About a DOW 1000

*I have been telling people for well over a year to buy guns and stock plenty of canned goods. These ijiots in Congress and the whores on Wall Street do not have a clue about what they've done and newsflash: the mid-term elections will not make one bit of difference. If you think pubbys replacing jackass' is going to turn this economy or country around you are sadly mistaken or just plain stupid. Reagan gave the keys away to Wall Street with a democratic congressional majority's blessing and HERE WE ARE!

Marc Faber Questions if Dow Could Hit 1,000
Faber also sympathizes with Prechter's view that there will one day be a complete credit collapse. Where he differs from Prechter is on that crucial factor, timing.
"It is likely that if the Dow where to fall by more than 20 percent from the present level there would be further massive fiscal and monetary stimulus packages – not just in the US but worldwide," Faber said.
"These economic policy measures would likely fail to boost economic activity in the US but could support asset markets," he added.
Faber's biggest problem with Prechter's theory is his view that surviving "dollars and dollar credits, representing the denominator of the DJIA, will rise in value, and the Dow – along with everything else used as money – will fall in dollar price."
"The question here is really, with the Dow below 1,000, what kind of dollars – and especially what kind of dollar credits – will survive," Faber said. "It is safe to assume that almost all banks in the world, and almost all governments, will be bust."
"I want my readers to think very carefully about the implications of a Dow below 1,000 (or even just below 5,000). Does anyone really think that the money printing presses won't run 24 hours a day? For sure I don't," he wrote in his August report.
And how do you trade the Dow at 1,000?
One suggestion from Faber is buying a self-sustainable farm in the middle of nowhere surrounded by high voltage fences and barbed wire and equipped with booby traps and an arsenal of machine guns, hand grenades and armed vehicles guarded by vicious Dobermans.

Saturday, July 24, 2010

MARKET ReCap: The Week That Was

* Man what a ride. GS down on an 82% revenue slide and AAPL crushed the analysts with an upside of a $1billion dollars more than estimated. F has only $28B in debt now with its $2B in quarterly sales and its stock is up another $2. Ford(F) Profit Tops Street View; Shares Climb. Ford Motor Co (F) posted a stronger-than-expected quarterly profit of $2.6 billion and said it was on track for higher earnings and lower debt in 2011, sending its shares up 4 percent. The No. 2 U.S. automaker lowered the top end of its range for U.S. auto industry sales for 2010, citing in part the slow recovery in the U.S. economy. But it said the recovery was sustainable.
IBM has forecasted that the future is bleak. But hey, GE is back with a 20% increase in dividend and a sharebuyback program. GE(GE) Raises Dividend 20%, Extends Share Buyback to 2013. General Electric Co., emerging from the global recession with a hoard of cash, raised its quarterly dividend by 20 percent and will resume stock buybacks sooner than it had predicted. The shares rose.

I will get my 11,400 just you wait and see. The BDI is finally headed back up four days in a row, albeit crawling, but hey, who's complaining?
23 July 2010
Baltic Dry Index (BDI) +25 1826

Markets are up last week and YTD now due to ONLY seven failed stress tested European Banks (if you believe that than you really are an IJIOT!). Just look at this chart. Up down up down and now sitting right below the ever key 200 day moving average, AGAIN. Better get used to it folks. From the illustrious lips of Betty Davis: "tighten your seatbelts folks, we're in for a bumpy ride."

*And looks like an overstretched rubber band doesn't it? And what happens to overstretched bands? THEY BREAK....

Newsworthy Notes:

*my personal favorite
Rangel May Finally Get Ousted? How could I be so lucky? He's 80 fucking years old people. Retire already! And he will get a pension and the best health coverage in the world courtesy of you know who who has no pension and no health insurance. God I hate these people. And what is wrong with his constituents? IMPEACH THE BASTARD!!

Rep. Charles Rangel faces battle of political life after House hits him with ethics charges
By Michael Mcauliff

Rangel, who gave up his chairmanship of the powerful Ways and Means Committee amid a two-year probe into ethics lapses, faces a fight that could force him from office after nearly 40 years. The 80-year-old dean of New York vowed he will answer the charges - and win. "You bet your sweet a--," the Korean War vet said in a feisty interview with reporters who asked if he would defend himself at trial. "If I can testify, I will." And Rangel looked primed for battle, declaring this is the chance he has been wanting for two years. "Now the facts are going to get out and I think that's good," he said. "I don't have any fear at all politically or personally what they come up with....So this is it, it's what I've been waiting for." It came to a head Thursday when the House Committee on Standards and Official Conduct announced its investigative panel found Rangel had in fact committed violations, and immediately created a new panel to hear the charges. That subcommittee will start the process of weighing Rangel's guilt Thursday, the panel said. The panel won't reveal the violations until next week. Sources told the Daily News they are likely among the most serious charges that have been swirled around Rangel, or the rare step of setting a trial process would not have happened. It was last used for in 2002 for an Ohio congressman, James Traficant, who was later convicted of racketeering. "This is like an indictment," said Melanie Sloan, of the Citizens for Ethics and Responsibility in Washington, which called on Rangel to resign.

*my second personal favorite:
Grassley Calls for Probe of General Motors' Plan to Acquire AmeriCredit. U.S. Senator Chuck Grassley asked the Special Inspector General for TARP to look into the details of General Motors Co.’s plan to buy a subprime auto lender and the Treasury Department’s involvement in the acquisition. GM and Fort Worth, Texas-based AmeriCredit Corp. announced the deal today that is intended to help the automaker reach more customers with damaged credit ratings or who want to lease a new car or truck. The purchase will be made with cash GM has on hand, Chief Financial Officer Chris Liddell said. “If GM has $3.5 billion in cash to buy a financial institution, it seems like it should have paid back taxpayers first,” Grassley, a Republican from Iowa, said in a statement on his website. “After GM’s experience with GMAC, which left GM seeking a taxpayer bailout, you have to think the company and, in turn, the taxpayers would be better off if GM focused on making cars that people want to buy and stayed clear of repeating its effort to make high-risk car loans.” GM’s former lending arm, now known as Ally Financial Inc., lost $17 billion on subprime mortgages.

EU Banks Survive Stress Test
Only 7 Flunk 'Stress' Trial, Surpassing Expectations but Fueling Skepticism
*my understanding is that these tests did not account for a sovereign default. In light of what is happening to countries like Greece, Spain, Portugal and Hungary, the risk of default is not an aberration. So who stands to lose? Taxpayers! AGAIN.

*Bernanke says we don't understand why the economy is behaving like a bad child.
Bernanke Comment on Uncertainty Unsettles MarketBy CHRISTINE HAUSER
Published: July 21, 2010

Wednesday was a good day on Wall Street until Ben S. Bernanke uttered two words: “unusually uncertain.”
While Mr. Bernanke’s views, delivered during his twice-yearly testimony before Congress, were largely in line with previous statements from the Fed, his testimony nonetheless sent the broad stock market down nearly 1.3 percent.
“The market seemed to focus on that ‘unusually uncertain’ comment a minute or so in and we never recovered,” said Philip J. Orlando, chief equity market strategist at Federated Investors. “And then it got progressively worse from there.”
Mr. Orlando continued: “Investors are just very nervous right now.”
The Dow Jones industrial average fell 109.43 points, or 1.07 percent, to 10,120.53. The broader Standard & Poor’s 500-stock index declined 13.89 points or 1.28 percent, to 1,069.59, and the Nasdaq composite index dropped 35.16 points or 1.58 percent, to 2,187.33.

*Transocean shut off their emergency alarm so the hedgehogs could get their beauty sleep!
BP-leased Deepwater Horizon rig did not have alarm fully activated at time of explosion: worker
The latest detail to emerge from the investigation into the massive Gulf of Mexico oil spill is alarming.
A technician for the Deepwater Horizon said Friday the alarm system for the BP-leased rig was partly disabled at night so workers could sleep without interruption.
The Deepwater Horizon exploded April 20 off the coast of Louisiana, killing 11 workers and sparking the worst offshore oil disaster in U.S. history.
To date, the government estimates between 94 million and 184 million gallons of oil have spewed into the ocean.
Mike Williams, a technician aboard the rig, told a federal investigative panel that while the alarm was activated to detect fire and toxic gas, the sound and light alarms were turned off.
"They did not want people woke up at 3 a.m. from false alarms," Williams told the panel.
Transocean, the company that owned the rig, said in a statement that workers were free to disable parts of the system to avoid the alarm going off during minor incidents.
"It was not a safety oversight or done as a matter of convenience," Transocean said.
Williams told the panel that if the alarm system was fully activated, it would have alerted workers before the blast.
Without the alarm, workers had to use a loudspeaker system to flee the burning rig.

*Goldmans SEC settled lawsuit is now under investigation. Are you serious?
SEC Watchdog Expands Probe to Include Goldman Sachs Settlement. The U.S. Securities and Exchange Commission’s internal watchdog said he will expand his probe into whether politics drove an agency lawsuit against Goldman Sachs Group Inc. to include the timing behind a $550 million settlement with the company.

*and why are't US auto prices coming down? In fact, F's profit came from stupid consumers willing to pay high prices for Ford vehicles. Can you imagine? Fix Or Repair Daily. Found on the Road Dead. What's changed? Absolutely nothing. Except maybe now you can sleep in your mortgage size car payment! I also heard China is handing out IPAD's or POD's to get people into showrooms. Now then I might consider a Ford. NOT!
China's Auto Prices May Decline Steadily, NDRC Says. China's vehicle prices may decline steadily in the second half of 2010 because of increasing inventories and pressure by wholesalers to meet sales targets, the country's planning ministry said. Automakers may join dealers in offering discounts in the fourth quarter, Cheng Xiaodong, an official with the National Development and Reform Commission, said today in a statement. China's car prices fell 1.18 percent in the first half from a year earlier, according to the agency. "The high prices we saw last year are long gone," said Yu Bing, an analyst at PingAn Securities Co. in Shanghai, who expects a 5 percent price drop for vehicles that cost about 100,000 yuan ($14,750). "Car prices are no doubt coming down." The Chinese government has been subsidizing rural residents' automobile purchases since last year. The country gave out 7.92 billion yuan to rural residents to help them buy motorcycles and automobiles in the first half, according to the planning agency. The government also handed out 2.44 billion yuan to subsidize trade-ins of old vehicles during the period, the agency said.

Tuesday, July 20, 2010

Goldmans Earnings Up but Revenue Leaves Little to be Desired

Meredith Whitney was right, again. GS missed expectations. So did IBM. Housing starts are also down. Three leading market indicators are off and the futures are already down 100 points for the DOW.

But don't be fooled into staying SHORT. The Baltic Dry Index is finally on the upswing albeit small. So I expect that I will win my bet of DOW 11,400.

Be careful today. likely sell off but some fantastic news will likely come over the next few days if not hours. Happy trading.

Saturday, July 10, 2010

A Look at the Past and The Coming Week

*the markets rallied this week after their shallacking of the previous two weeks but still couldn't get the volume to move up through some key resistance levels. But I have faith that the PPT will do their duty by getting the market to rally close to 11,000 yet again and maybe back up through the 200 day moving average. Only this time, the banks earnings that will come from currency trades, bond and stock trading (shorting the Euro helped jack the Dollar and shorting the stock and bond markets) will be seen right through by savvy investors and truthtelling analysts. This means again that you should buy now and sell into the earnings news.


*EARNINGS SEASON BEGINS MONDAY JULY 12: expect a stock market rally to at least 10,500 on crystal ball forecasting and better than expected earnings, AGAIN! Alcoa kicks off the season on Monday.
The big earnings on deck are Alcoa Inc. (NYSE: AA), CSX Corp. (NYSE: CSX), Intel Corp. (NASDAQ: INTC), YUM! Brands Inc. (NYSE: YUM), J.P. Morgan Chase & Co. (NYSE: JPM), Google Inc. (NASDAQ: GOOG), Advanced Micro Devices Inc. (NYSE: AMD), Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), and General Electric Co. (NYSE: GE). Read more: 24/7 Wall St. - Insightful Analysis and Commentary for U.S. and Global Equity Investors

The Past Week in Review

*in case you have been wondering as to why the stock market had an almost 15% retracement: BDI has been falling for months. This means there has been no industrial manufacturing around the world. The price to move iron ore has dropped precipitously. Keep an eye on this very important indicator.
09 July 2010
Baltic Dry Index (BDI) -38 1902

How is Spending Still Strong?
Since Lehman collapsed in September 2008, consumption has remained surprisingly strong in the face of high unemployment (thus lower wages), lower asset values (less ability to tap home or 401k for spending), and a collapse in consumer credit.
How? The government! Less taxes and higher transfer payments (i.e. unemployment / welfare benefits).

*this is a huge problem folks. Until this government starts creating jobs, once stimulus drys up and tax revenue has fallen off the cliff, our consumer fed decades economy will come to a screeching halt. Spending by the government and all fifty states has already dropped to meet a decrease in tax revenue, but public employees and the greedy do nothings in Congress are still a drag on the economy. The mistake thats being made is raising taxes when no one has any money. Thats always sound isn't it? IJIOTS! You never see them raise taxes when things are good. Thats why we will NEVER fix our problems. Myopic Bubble heads.

A Worried Federal Reserve
Bernanke is considering buying up more MBS due to deflationary risks and a slow moving housing market recovery. I have said for two years now that 2011 is when house prices will bottom out and that may be the time to start buying. I make this presumption based on simple economics: consumers have no jobs and the jobs they do have will pay lower wages harking back to the 90's and in some cases as far back as 70's wages. Therefore, the inflationary prices of the housing market over the past 15 years are not sustainable and no one in their right cotton picking mind will get themselves into an exotic mortgage EVER again. So banks will continue to foreclose and suffer huge losses from their phony fee induced mortgage and asset backed securities markets. (I cannot find the quotes from Helicopter Ben so take it as a grain of salt if you wish).

*when Meredith Whitney talks, we all should listen. Meredith downgraded GS to a sell at $187. Dumb blonde right?
Meredith Whitney says GS and MS will see a drop in earnings.
Meredith Whitney Cuts Goldman Sachs (GS), Morgan Stanley (MS) Estimates
Banking analyst Meredith Whitney on Thursday cut her earnings estimates for Wall Street banks Goldman Sachs (GS) and Morgan Stanley (MS), in the days before the two are set to report earnings.
Whitney, head of the Meredith Whitney Advisory Group, lowered her estimate for Goldman’s Q2 EPS to $1.70 from her previous estimate of $4.75. She also cut her full-year estimate for Goldman for fiscal 2010 from $20.00 to $15.70. The Street is looking for 2010 EPS of $16.76
Morgan Stanley’s projection for 2010 were cut down to $0.40 EPS for the quarter (current Thomson Reuters (TRI) consensus is $0.50).
Goldman Sachs shares lost $1.17, or 1.19%, to $134.15 while Morgan Stanley rose 6 cents, or 0.25%, to $24.01 in afternoon action Thursday.

Tuesday, July 6, 2010

Todays Mood Swing

*Up down and down up. If you watch it enough all day like I do, you get whiplash,not to mention whipsawed. Luckily for me, I can trade the dollar move and make a little money each day. I am waiting for a rally if only because everyone is sick and tired of the day to day I don't know what. Happy trading!


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